By Way Of Contrast: “Uncle Dan” Drew

Daniel Drew (1797–1879) was a short, chunky man with a face as seamed and wrinkled as a prune; he walked with a stealthy tread, like a cat; his attire was downright dowdy; he affected the bland, who-me? air of a hedgerow parson. Yet for a quarter-century this man was one of the most justly feared in the financial circles of nineteenth-century America.

He began his business career as a cattle drover. It was rough and risky work, attracting chiefly the quick-witted and unscrupulous, and from the start Drew proved himself peerless as a swindler. He conceived the ruse of feeding his steers salt on the last night before a sale; next morning each animal, crazed with thirst, swilled enough water to add fifty pounds to its weight, and presently a new phrase, “watered stock,” had entered the language.

In 1834 Drew had enough capital to engage in an epic duel with Cornelius Vanderbilt over who should control the Hudson River steamboat business. By a sustained policy of rate cutting and betrayal of his own associates Drew won; and by 1844 he was off on his fearsome, singlehanded career as the Great Bear.

In the spring of 1866 Drew, who had by that time wangled his way to treasurer of the Erie Railroad, advanced the line $3,500,000, taking as security 28,000 shares of unissued stock and $3,000,000 worth of bonds convertible into stock. He then cheerfully went short in a rising market, dumped 58,000 shares on the bewildered bulls, and when the stock dove from 95 to 50, shoveled in the profits, cackling. During this venture, Drew’s lieutenants were two young scoundrels on the make—Jim Fisk and Jay Gould.

When a Vanderbilt judge ordered Drew’s arrest, he prudently retreated across the Hudson to Jersey City with Fisk and Gould, taking with him $6,000,000 in greenbacks. It was estimated that in the final settlement of the “Erie War” the line was milked of no less than $9,000,000; and in October, 1868, Drew, Fisk, and Gould used their loot to attack bank credit, stock prices, and the foreign exchange. Thousands of businessmen in and out of Wall Street were ruined in the process, banks were brought to the verge of suspension, and the national credit was seriously threatened.

But suddenly, in 1870, Drew’s luck ran out. He was cornered in a bull market, lost $1,500,000, and in the Panic of 1873 was irrevocably ruined. On no hand was there any mercy. In March, 1876, he filed a schedule in bankruptcy. He was old and broken, hated and scorned.